UN Corporate Influence Critique
UN Corporate Influence Critique
                                                Published by
                 TRAC–Transnational Resource & Action Center
                                          www.corpwatch.org
September 2000
        Tangled Up In Blue:
   Corporate Partnerships at the United Nations
                          Table of Contents:
                     Executive Summary ........................................................1
                     Introduction......................................................................2
                     Four Fatal Flaws of the Global Compact ........................3
                     Global Compact Corporate Partners................................4
                     Other Partnerships............................................................6
                     The UN’s Guidelines ......................................................7
                     UN-Corporate Partnerships chart ....................................8
                     A Brief History ................................................................9
                     Ideology and Politics of Corporate Partnerships ..........10
                     Toward a Corporate-Free United Nations......................11
      • This report argues that corporate influence at the UN is already too great, and that new partner-
        ships are leading down a slippery slope toward the partial privatization and commercialization of
        the UN system itself.
      • The Secretary General’s office and UN agencies such as UNICEF, UNDP, WHO, and UNESCO
        are partnering with corporations known for human, labor and environmental rights violations.
      • The Global Compact and its cousin partnerships at other UN agencies threaten the mission and
        integrity of the United Nations.
     1. Support the Code of Conduct on transnational corporations and human rights being drafted by the
     UN Subcomission on Human Rights.
     2. Support UN-brokered multilateral environmental and health agreements which can reign in abusive
     corporate behavior on a global scale.
3. Pressure the US government to pay the UN the money it owes with no strings attached.
     4. Support and promote The Citizens Compact, which calls for a legally binding framework for
     corporate behavior.
Tangled Up In Blue                                                                                               3
        I n t r o d u c t i o n
            s we move into a new millennium, “We The              same UN agencies which NGOs and citizen movements
  First…we would like to see companies who join the           1. Wrong Companies
   Global Compact make a public statement that they        The Secretary General and various agency heads
will be open to independent monitoring…Secondly, it     have shown poor judgement by allowing known
 has to be reported publicly…all the stakeholders are   human rights, labor and environmental violators to
   entitled to have the information resulting from that join in UN partnerships. Specific partners of the
    independent monitoring. And thirdly…a sanctions     Compact include Nike, Shell, Rio Tinto, Novartis, BP,
  system has to be envisaged…so that companies who      Aracruz, BASF, Daimler Chrysler, Bayer and DuPont.
     violate these principles cannot continue to benefit   Other UN agencies have shown similarly poor
from the partnership…We think that those three steps    judgement by choosing Chevron, McDonalds’s,
are absolutely essential if this initiative is to be effec-
                                                        Disney and Unocal as partners in their programs (see
        tive, credible and win the trust of human rightschart). In some cases, these choices are clearly in
                                           organizations.
                                                        violation of the UN’s own guidelines that “companies
    Pierre Sane, Amnesty International, July 26, 2000.  which violate human rights are not eligible for part-
                                                        nership.”4 Other partner companies do not stand
       he Global Compact consists of                                 accused of such violations, but many are
Tangled Up In Blue                                                                                                  5
 The Global Compact Corporate Partners
  Below is a partial list of some of the 50 Global          University after they joined the WRC. Nike became a
Compact partners with the most egregious human              sweatshop poster child not just through complicity in
rights and environmental records.                           labor abuses but through active searching for coun-
                                                            tries with non-union labor, low wages, and low envi-
   Shell is a corporation with a history of environ-
                                                            ronmental standards for its manufacturing operations.
mental destruction and complicity in human rights
                                                            Nike is a leader in the “race to the bottom”—a trend
abuses, most infamously in Nigeria. Ken Saro-Wiwa
                                                            that epitomizes the negative tendencies of corporate-
blamed his execution squarely on Shell. Its opera-
                                                            led globalization.
tions there are also notorious for environmental con-
tamination and double standards. Shell has adopted             Rio Tinto Plc is a British mining corporation
sophisticated rhetoric about its social responsibilities,   which has created so many environment, human rights,
but it has not shown understanding, let alone remorse,      and development problems that a global network of
about its own role. For example, on its website, Shell      trade unions, indigenous peoples, church groups, com-
posts a photograph of a pro-Ogoni rally, without            munities and activists has emerged to fight its abuses.
acknowledging that the Ogoni people’s protests have         For instance, the company stands accused of complici-
been against Shell itself.                                  ty in or direct violations of environmental, labor and
                                                            human rights in Indonesia, Papua New Guinea,
  BP Amoco is another company with sophisticated
                                                            Philippines, Namibia, Madagascar, the United States
rhetoric on environmental and social issues. But their
                                                            and Australia, among others.
actions do not measure up. CEO John Browne admits
that climate change is a problem for any oil company,          Novartis is engaged in an aggressive public rela-
yet his company continues to search for oil and gas         tions and regulatory battle to force consumers and
even in remote and pristine regions. Its investments in     farmers to accept genetically engineered agriculture,
renewable energy are a pittance compared with the           without full testing for potential harms and without
size of the corporation and its investments in ongoing      full access to information. The behavior of Novartis
fossil fuel exploration and production.                     in the area of genetically engineered agriculture is
                                                            diametrically opposed to the precautionary principle,
  Nike, an international symbol of sweatshops and
                                                            one of the principles of the Global Compact.
corporate greed, is the target of one of the most active
global campaigns for corporate accountability. The            Other companies with damaging or controversial
company has made announcements of changes to its            practices in the Global Compact include Aracruz
behavior only after enormous public pressure. It has        Cellulose, targeted by Brazilian activists, Aventis,
also aggressively opposed the only union and human          one of the companies behind the $50 million per year
rights-group supported independent monitoring pro-          PR campaign to gain acceptance for transgenic foods,
gram—the Worker Rights Consortium (WRC). CEO                German chemical giants Bayer and BASF, DuPont
Phil Knight withdrew a $30 million donation to the          of ozone depletion infamy, and DaimlerChrysler, the
University of Oregon after the University joined the        auto maker with the highest proportion of gas guz-
WRC. Nike also cut its multimillion dollar contracts        zling SUV’s on the American market.
with the University of Michigan and Brown
                                                            3. Wrong Image
Nations, because they most emphatically are not.”5            Corporations attempt to project certain values and
Obviously you cannot have a full partnership with an        images. Disney hopes to represent family entertain-
organization of interests antithetical to your own. You     ment. McDonald’s advertises fast, friendly food. Nike
cannot simultaneously regulate and partner with the         associates itself with the joy of sports. Shell, Chevron
same corporations. Clearly the UN must have interac-        and BP promote their own commitment to environ-
tions with corporations, as when they procure goods         mental stewardship.
and services or to hold them accountable, but it
                                                              Sometimes they inadvertently take on other associa-
should not aspire to “partnership” except with organi-
                                                            tions. To many, Nike also means sweatshops,
zations that share its goals.6
                                                            McDonald’s represents unhealthy food and Ugly
Tangled Up In Blue                                                                                                  6
Americanism, Disney projects sweatshops and stereo-         and is constantly being done—without the UN. The
types, Shell is associated with human rights violations     posting of best practices sounds suspiciously like the
and ecological destruction, and the oil industry as a       approach of the World Business Council for
whole is known for global warming, greed and abuse          Sustainable Development and other groupings of self-
of power.                                                   selected corporate environmentalists and corporate
   When the Secretary General of the United Nations         humanitarians who have produced volumes of case
joins the heads of such corporations on the podium,         studies on how business is doing good. This volun-
or when a UN agency joins such companies in a joint         tary, anecdotal approach leads mainly to “incipient
venture, a disturbing messsage is sent to the public.       and piecemeal progress,” as one UN report puts it.10
As the UNDP guidelines put it, when a UN agency               Meanwhile, Pierre Sane, head of Amnesty
“is engaged in a public relations activity within the       International, who appeared at the launch of the
framework of a corporate relationship, a mutual             Global Compact, has already warned that only inde-
image transfer inevitably takes place.”7                    pendent monitoring—with public reporting of the
   This is especially true in the era of corporate brand-   companies’ performance—along with strong enforce-
ing. With the image transfer, the UN’s positive image       ment mechanisms such as sanctions, would give the
is vulnerable to being sullied by corporate criminals,      Global Compact credibility.11
while companies get a chance to “bluewash” their              Amnesty’s position reflects a broader sentiment
image by wrapping themselves in the flag of the             among many human rights, labor and environmental
United Nations.”8 When biotech leaders Novartis and         groups from around the world. For instance, the
Aventis appear as part of the Global Compact, there is      Millenium Forum, an event organized by the UN in
an impression that the UN has officially endorsed its       May 2000 to gain NGO input for the Millenium
products—genetically engineered seeds and foods—            Assembly, called for a legally binding framework for
despite the enormous controversy over the issue.
   Behind the issue of image is the issue of values.
The UN stands for peace, security, human rights,
development, environment and health. These values
must remain clear of the commercial values of corpo-
rations. Once the UN tarnishes its image with corpo-
rate brands, the compromising of its values is more
likely to follow.
4. No Monitoring or Enforcement
   The Global Compact has no monitoring or enforce-
ment mechanism. This means companies that sign up
get to declare their allegiance to UN principles with-
out making a commitment to follow them. The cor-
porate partners have made it crystal clear that this
arrangement is a key prerequisite of their participa-
tion. As Maria Livianos Cattui, the secretary-general
of the International Chamber of Commerce recently
put it, “business would look askance at any sugges-
tion involving external assessment of corporate per-
formance, whether by special interest groups or by
UN agencies. The Global Compact is a joint commit-
ment to shared values, not a qualification to be met.
It must not become a vehicle for governments to bur-
den business with prescriptive regulations.”9
   Given the ICC position, the Global Compact has
settled on the posting of so-called “best practices” by
the companies themselves on a UN website as a               The UN has shown poor judgment by partnering with viola-
stand-in for independent montoring. Participating           tors of human, labor and environmental rights. Ogoni peas-
NGOs can scrutinize the claims, and companies can           ant tends her crops just 30 meters from a Shell gas flare.
rebut the NGOs. Of course this could all be done—                                                  Photo: Project Underground
Tangled Up In Blue                                                                                                         7
                  Other Partnerships
  Partnership programs are proliferating in the UN       the proposed Global Sustainable Development
system, often before guidelines can be put in place,     Facility, developed under the previous Administrator
and before the implications of the partnerships are      Gus Speth. Mark Malloch-Brown, the new head of
understood.                                              UNDP has killed the project, but touts other partner-
                                                         ships such as a BP Amoco fishing project in Angola
UNHCR and Unocal Corporation                             (see Global Compact Partners for a brief overview of
  Former High Commissioner on Refugees Sadako            BP Amoco) and a Chevron-sponsored business center
Ogata co-chaired two meetings of the Business            in Kazakhstan.35 Chevron has been a leading oppo-
Humanitarian Forum with John Imle, President of          nent of the UN-brokered Climate Convention on
Unocal, a company notorious for complicity in            global warming. The company is also responsible
human rights violations in Burma. As a partner of        for numerous local environmental problems in places
the brutal Burmese military government in the            as far flung as Nigeria, Texas, California and
Yadana pipeline project, Unocal has benefited from       Indonesia. The company currently faces a lawsuit
forced labor, forced relocations and other crimes car-   for complicity in human rights violations in Nigeria.
ried out for security of the project. Two lawsuits
against Unocal alleging crimes against humanity are      UNICEF
currently underway in federal courts.                      UNICEF has extensive interactions with corpora-
   Although this is not a full UN partnership program,   tions, and gets substantial income from the private
the High Commissioner showed remarkable insensi-         sector. Executive Director Carol Bellamy points out
tivity by sharing the podium with the head of a com-     that UNICEF is very careful to "constantly appraise"
pany that creates refugees in its business operations.   the companies it deals with, and its guidelines
The Business Humanitarian Forum was founded by a         exclude makers of products like infant formula and
former Vice President of Unocal, yet neither the High    landmines. However UNICEF and WHO are part of
Commissioner nor many of the other humanitarian          UNAIDS, a partnership with five major pharmaceuti-
organizations in attendance seem concerned that it       cal companies, including (parent companies of) vio-
will be used to promote a good image for a company       lators of the WHO Code of Marketing of Breastmilk
with such a bad reputation.34 Pro-democracy groups,      Substitutes. According to the International Baby
including those working with Burmese refugees and        Food Action Network, UNICEF also has a partner-
people affected specifically by Unocal, were out-        ship with Johnson & Johnson, a known Code viola-
raged by UNHCR’s participation.                          tor. The partnerships are so troubling that at least
                                                         two UNICEF officials recently resigned in protest.36
UNESCO and Disney
  UNESCO has a number of partnerships with the
                                                         UNAIDS and the Pharmaceutical Industry
private sector, mainly in the form of licensing agree-     UNAIDS is sponsored by various UN agencies—
ments which allow the use of UNESCO’s logo or            UNICEF, UNDP, WHO and others. It has a partner-
label. UNESCO excludes companies that violate            ship with five pharmaceutical corporations
human rights, make or distribute, arms, tobacco or       Boehringer Ingelheim, Bristol Myers Squibb,
alcohol. Yet it allowed its name to grace the Youth      Hoffman-LaRoche, Glaxo Wellcom and Merck to
Millennium Dreamer Awards, organized mainly by           address the AIDS crisis in Africa. These companies
Disney and presented in Disneyland in Orlando,           are working with the UN to significantly lower the
Florida last spring. Disney is known for use of          costs of AIDS drugs there. However, a number of
sweatshop labor in Haiti to make clothes with pic-       AIDS groups charge that these companies’ intent—
tures of Mickey Mouse and other Disney characters.       and collaterally the role of the UN—is to forestall the
Disney movies are characterized by racial and sexual     seizure of drug company patents (and the loss of
stereotypes, making the company a questionable           markets). Countries such as South Africa and
choice to sponsor Youth Awards.                          Thailand have passed "compulsory licensing" laws
                                                         that allow for the seizure of AIDS drug patents in the
UNDP and Chevron                                         interest of reversing a massive human health
    The UNDP drew the ire of activists last year with    disaster.37
8                                                                                              Tangled Up In Blue
regulating corporations with respect to human, labor        demonstrate “responsible citizenship.” (For profit
and environmental rights.12                                 enterprises are not “citizens,” but the UN has accept-
  Stuck between NGO insistence and business resist-         ed this usage.)
ance, the UN claims it has neither the capacity nor            The guidelines state that companies that violate
the mandate to monitor or enforce compliance with           human rights “are not eligible for partnership.” This is
the Global Compact principles.                              an example of a guideline that most NGOs would sup-
  But it is not at all clear that the UN enjoys a man-      port. However, the UN claim that it lacks the capacity
date to develop the Global Compact either. In fact,         to monitor corporations’ activities creates a “Catch
references to the Global Compact were deleted from          22” situation. How can the world body determine if a
an official UN declaration at the Copenhagen Plus 5         corporation is complicit in human rights violations if
Social Summit when a significant bloc of developing         it cannot monitor its activities? Maybe this is why
country governments opposed its voluntary, non-bind-        Mr. Annan violated the guidelines just a few days after
ing nature. As Roberto Bissio of the Third World            they were published by inviting Shell to join the
Institute in Uruguay explains it, “the developing           Global Compact and its associated partnerships.
countries were clearly not sympathetic to the                  Perhaps the most shocking aspect of the guidelines
Compact, not for any desire to leave transnational          is the potential to use the UN olive branch emblem on
corporations off the hook, but out of fear that such an     corporate funded projects or partnership projects.
arrangement might benefit them even more.”13                Companies may not use the logo to sell their prod-
                                                            ucts. But hypothetically, we could see a clinic funded
                                                            by Rio Tinto, operated by WHO, with the Rio Tinto
       T h e   U N ’ s                                      and UN logos side by side. For activists fighting Rio
                                                            Tinto to save their own environment and health, that
      G u i d e l i n e s                                   would be quite a slap in the face. For Rio Tinto it
                                                            could be a PR bonanza—for example, if it were to
  Business entities that are complicit in human rights      publicize this collaboration with the UN in a televi-
   abuses, tolerate forced or compulsory labor or the       sion commercial.
use of child labour...or that otherwise do not meet the
                                                               At the launch of the Global Compact, when asked
 relevant obligations or responsibilities by the United
                                                            if we might eventually see the Nike swoosh and the
              Nations, are not eligible for partnership.
                                                            UN emblem side by side, a Nike representative
   Guidelines [for] Cooperation Between the United          refused to answer. When asked the next day in a
 Nations and the Business Community, July 17, 2000          radio interview, she also evaded the question.14
he Secretary
T      General’s
       Guidelines on
Cooperation Between
the United Nations and
the Business
Community provide a
general guide for how
the UN should
increase its coopera-
tion with corporations
“in a manner that
ensures the integrity
and independence” of
the UN. The forms of
cooperation envisioned
include advocacy,
fundraising, policy dia-
logue, humanitarian
aid and development.       When asked if we might eventually see the Nike swoosh and the UN emblem side by side, a
Business partners must     Nike representative refused to answer. Nike sweatshop in Vietnam.
                                                                                                       Photo: Dara O’Rourke
Tangled Up In Blue                                                                                                       9
Other UN Agency Guidelines                                                  WHO’s draft guidelines have been
                                                                          the subject of controversy among
   Encouraged by the Secretary                                            their NGO partners. Health Action
General, many UN agencies have              Companies can                 International (HAI) and International
started their own private sector part-
                                                                          Baby Food Action Network (IBFAN),
nership programs. Agencies have also        "bluewash" their              both of which work closely with
promulgated guidelines for these
partnerships, including guidelines for      image by wrapping WHO, wrote comprehensive and
                                                                          rather scathing critiques of the draft
excluding companies with bad                themselves in the guidelines. They included specific
records. For example, UNICEF’s
                                                                          objections to provisions allowing sec-
guidelines exclude landmine, tobacco        UN     flag                   ondments of industry staff to the
and infant formula manufacturers.15
                                                                          agency, and general questions about
   The UNDP has guidelines emphasizing the need for     the logic of entering partnerships with corporations.
assessment of companies to determine whether “the       HAI wrote to Director General Gro Brundtland
activities or products of the corporation are compati-  objecting to conflicts of interest between the “core
ble with UNDP image and ideals” and whether they        purpose of WHO-which is to serve the public interest-
are “deemed to be ethically, socially or politically    and the aim of pharmaceutical companies, which is to
controversial or of such a nature that involvement      maximize profits for their shareholders.”17 IBFAN
with UNDP cannot be credibly justified to the general   questioned the logic behind the partnership ideal,
public.” The guidelines mention “exploitative involve-  pointing out that “caution and healthy distrust seem to
ment in developing nations, illegal financial transac-  be the appropriate attitude for dealing with commer-
tions, drug trafficking, producing or trading in arms,  cial enterprises, many of which are currently involved
child labour, activities endangering the environment,   in a big PR exercise to represent themselves as
poor and/or exploitative working conditions for         ‘responsible corporate citizens’ which should be
employees, poor gender policies, discriminatory         allowed to operate with a minimum of outside inter-
behaviour, etc.”16                                      ference or regulation.” 18
Tangled Up In Blue                                                                                                10
              A   B r i e f
                                                               Kyoto Protocol to the Climate Convention, the
              H i s t o r y                                    Biodiversity Convention and its Biosafety Protocol.
     The environment is not going to be saved by envi-         In every one of these international meetings, corpo-
      ronmentalists. Environmentalists do not hold the         rate lobbyists, their industry associations and public
                                                               relations firms have aligned themselves with govern-
                             levers of economic power.
                                                               ments resisting these treaties and have aggressively
            Maurice Strong, defending the central role         attempted to undermine other governments’ efforts to
   transnational corporations were playing in the 1992         address pressing global environmental problems.22
    Earth Summit, of which he was Secretary General.
                                                              Similarly, Philip Morris, British American Tobacco,
                                                           and other tobacco companies worked for years to
         ver the last decade, there had been a shift
O
                                                           undermine WHO tobacco control intiatives. These
         from secretive, undue influence by business at    corporations’ own documents show that they viewed
         the United Nations, to a pattern                                     WHO as one of their main enemies
of the UN inviting corporate influence.      Corporate influ-                 and that they attempted to influence
   In 1992, Secretary General Boutros                                         WHO and other UN agencies, along
Boutros Ghali virtually eliminated the       ence has been                    with representatives of developing
UN Center on Transnational                   rampant at UN                    countries, to resist tobacco control
Corporations (CTC), which had been                                            efforts. The report states that “the
set-up to help developing countries          negotiations to                  tobacco companies’ activities
monitor and negotiate with large compa-                                       slowed and undermined effective
nies. The downsized CTC, incorporated        protect    health      and       tobacco control programs around the
into a new division, re-oriented itself                                       world.”23
                                             the environment
toward helping match up corporations                                            In addition to the corporate influ-
and countries for foreign investments.                                        ence at many specific negotiations
This change had been an objective of the U.S. as well      sponsored by the UN, business has maintained an
as some of the UN’s most vocal critics, such as the        overall agenda of weakening the UN itself. Over the
Heritage Foundation.19                                     last 10 years, its consistent position on matters under
   At the same time, Maurice Strong, the Secretary         UN auspices such as environment and human rights,
General of the UN Earth Summit, invited business           is that voluntary, toothless agreements are best.
leaders to form a group to advise him on business’         Meanwhile, when it comes to the WTO and other
role in sustainable development. The Business              trade negotiations, binding, enforceable rules favor-
Council for Sustainable Development played a               able to transnationals are deemed appropriate.
prominent role at the Summit, and along with the
ICC, eliminated references to transnational corpo-
rations and emphasized the role of “self-regula-
tion.” The ICC was pleased with the outcome of
the Earth Summit, because “the possibility that
the conference might be pushed to lay down
detailed guidelines for the operations of transna-
tional corporations” did not materialize.20
   Meanwhile, Mr. Strong created an “Eco-Fund”
to help finance the UN event. The Eco-Fund
franchised rights to the Earth Summit logo to the
likes of ARCO, ICI, and Mitsubishi Group mem-
ber Asahi Glass.21
   In virtually every international environmental
negotiation since the Earth Summit, business has
played an prominent and aggressive role.
Corporate influence is rampant at negotiations of     The biotechnology industry has actively lobbied against key
U.N.-sponsored international treaties and conven- provisions in the UN-brokered Biosafety Protocol. Protesters
tions to protect the global environment such as the rally against genetically modified food near San Francisco, USA.
Montreal Protocol to Protect the Ozone Layer, the                                                       Photo: Scott Braley
Tangled Up In Blue                                                                                                      11
 I d e o l o g y   a n d
   P o l i t i c s  o f                                            UN Subcommission for the Promotion and Protection
                                                                   of Human Rights, there has been recognition that the
    C o r p o r a t e                                              WTO, in particular, has been a “nightmare” for devel-
 P a r t n e r s h i p s                                           oping countries and that the system of trade liberal-
                                                                   ization needs a major overhaul.27
      We cannot fail in this endeavor. Too much is at                 In his 1999 speech to business leaders in Davos,
  stake. Globalization and open markets are at stake.              Switzerland, Secretary General Annan warned of a
  Ending world poverty is at stake. So too are human               backlash against globalization, saying that enactment
                 decency and the future of the planet.             of human rights, labor rights and environmental prin-
                                                                   ciples are necessary to avoid threats “to the open
    UN Secretary General Kofi Annan speaking about
                                                                   global market, and especially the multilateral trading
                    the Global Compact, July 2000.
                                                                   regime.”28 Just ten months before Seattle, he was
                                                                   prescient on the backlash. But, by declaring that
         he ideology behind the Global Compact is a
T
                                                                   globalization should be saved by putting a “human
         belief in the benefits of open markets, which             face” on it, by saying that “social values” should be
         are seen by high-ranking UN officials as “the             “advanced as part and
only remotely viable means of pulling billions of peo-             parcel of the globaliza-     The UN could be
ple out of the abject poverty in which they find them-             tion process,” 29 he has
selves.”24 The term “open markets” may sound entic-                allied himself with the      a counterbalance
ing, but in the real world it often means the kind of              corporate agenda for
rules enforced by the WTO at the expense of develop-               globalization at a           to the WTO and
ing countries, farmers, consumers and the environ-                 moment when this             corporate
ment. Peoples’ movements against corporate global-                 agenda is increasingly
ization have very specifically targeted these rules and            under question.              globalization
the ideology behind them.                                             Clearly, the
   It is undeniable that many UN, corporate and gov-               Secretary General’s
ernment officials believe that globalization is essen-             corporate gambit is driven not by pure ideology but
tially beneficial and merely needs some tinkering. As              also by realpolitik. He is seeking political support
a Washington Post editorial on the Global Compact                  from powerful corporations who already have an
termed it, globalization needs a “softener” to dull its            undue influence on the U.S. government. The United
harsh edge, prevent a backlash, and improve the dis-               States still owes hundreds of millions of dollars in
tribution of benefits.25                                           unpaid dues to the UN—money withheld by Jesse
   But there are many who see globalization as essen-              Helms and other conservatives in the Senate (in part
tially “the push by big companies and financial insti-             to pressure the UN to become more business friend-
tutions to have more power,” as Martin Khor, Director              ly). By promising to “continue to make a strong case
of the Third World Network told the UN Millenium                   for free trade and open global markets,” as part of the
Forum last May. According to Khor and others, “we                  Global Compact, Mr. Annan has attempted to enlist
have to fight the system of globalization we have                  corporate bodies like the U.S. Chamber of Commerce
today.”26 Even within the UN system, notably at the                to return the favor and pressure Congress to pay the
                                                                   money it owes.30
                                                                      But in attempting this deal, the Secretary General
                                                                   risks losing political support, even in the U.S., from
                                                                   those who support only a corporate-free United
                                                                   Nations. Kofi Annan is no doubt sincere in his desire
                                                                   to improve the lot of the world’s poor. But when the
                                                                   head of the United Nations offers support for the cor-
                                                                   porate definition of free trade and open markets, and
                                                                   allows these to be declared among the “shared values”
                                                                   of the international community, he threatens a betray-
Mr. Annan has allied himself with the corporate globaliza-         al of millions of people fighting for a more just inter-
tion agenda at a moment when it is increasingly under              national economic order.
question. Anti-WTO protest, Seattle, November 1999.
                                               photo: Marc Beck
                                                                  Tangled Up In Blue                                    12
       T o w a r d    a
     C o r p o r a t e -                                     2. Support Binding International
                                                                Environmental and Public Health
    F r e e   U n i t e d                                       Agreements
        N a t i o n s                                          While corporations and their industry associations
                                                             continue to lobby aggressively to weaken internation-
                                                             al agreements, these are key mechanisms that can be
    Multinationals are too important for their conduct
                                                             used to hold transnational corporations accountable
  to be left to voluntary and self-generated standards.
                                                             on a global scale.
              UNDP Human Development Report 1999
                                                               Agreements such as the Kyoto Protocol, the
                                                             Biosafety Protocol and the Tobacco Convention are
                                                             created and enforced by governments. But because
    f the Global Compact and other corporate partner-        corporations are at the root of the problems they
Tangled Up In Blue                                                                                                 13
A p p e n d i x                                A
                  T h e                G l o b a l                    C o m p a c t
The Principles                                                 Companies Supporting
                                                               the Global Compact
Human Rights
                                                               ABB Ltd.                            Sweden/Switzerland
The Secretary-General asked world business to:
                                                               Aluminum Bahrain                                Bahrain
Principle 1: support and respect the protection of interna-    Aracruz Celulose SA                               Brazil
tional human rights within their sphere of influence;          Aventis                                 France/Germany
Principle 2: make sure their own corporations are not com-     Bayer Corporation                              Germany
plicit in human rights abuses.                                 BP Amoco Corporation              United Kingdom/USA
Labour                                                         BASF                                           Germany
                                                               British Telecom                         United Kingdom
The Secretary-General asked world business to uphold:
                                                               Charoen Phokpand Group                         Thailand
Principle 3: freedom of association and the effective recog-   Concord                                          Mexico
nition of the right to collective bargaining;                  Credit Suisse Group                          Switzerland
Principle 4: the elimination of all forms of forced and com-   Dupont                                             USA
pulsory labour;                                                DaimlerChrysler                          Germany/USA
Principle 5: the effective abolition of child labour; and      Deloitte Touche Tohmatsu         France/United Kingdom
Principle 6: the elimination of discrimination in respect of   Deutsche Bank AG                               Germany
employment and occupation.                                     Deutsche Telekom AG                            Germany
                                                               Eskom                                       South Africa
Environment                                                    Esquel Group                                 Hong Kong
The Secretary-General asked world business to:                 France Telecom                                   France
Principle 7: support a precautionary approach to environ-      Gerling Group                                  Germany
mental challenges;                                             Organizacoes Globo                                Brazil
Principle 8: undertake initiatives to promote greater envi-    Group Suez Lyonnaise                             France
ronmental responsibility; and                                  International Service System                   Denmark
Principle 9: encourage the development and diffusion of        LM Ericsson                                     Sweden
environmentally friendly technologies.                         Martina Berto Group                            Thailand
                                                               Minas Buenaventura                                  Peru
Labor and Civil Society Organizations                          Natura Cosmeticos                                 Brazil
                                                               Nike Inc.                                          USA
and Business Associations Supporting
                                                               Norsk Hydro ASA                                 Norway
the Global Compact                                             Novartis                                     Switzerland
Labor & Civil Society                                          Pearson plc.                            United Kingdom
The International Confederation of Free Trade Unions           Power Finance Corporation                          India
Amnesty International                                          Rio Tinto plc.                          United Kingdom
Lawyers Committee for Human Rights                             Royal Dutch/Shell Group United Kingdom/Netherlands
Human Rights Watch                                             SAP                                            Germany
The World Conservation Union                                   Seri Sugar Mills Ltd.                           Pakistan
World Wide Fund for Nature                                     ST Microelectronics                              France
World Resource Institute                                       Statoil                                         Norway
International Institute for Environment and Development        The Tata Iron and Steel Company Ltd.               India
Regional International Networking Group
                                                               3 Suisses France                                 France
                                                               UBS AG                                       Switzerland
Business Associations
                                                               Unilever                    United Kingdom/Netherlands
International Chamber of Commerce
                                                               Volvo Car Corporation                      Sweden/USA
International Organization fo Employers
                                                               WebMD                                              USA
World Business Council on Sustainable Development
Prince of Wales Business Leaders Forum
Business for Social Responsibility                             For the UN’s perspective on the Global Compact, see
                                                               http://www.unglobalcompact.org/
Tangled Up In Blue                                                                                                    14
                                                                A p p e n d i x                         B
                          CITIZENS COMPACT
                        ON THE UNITED NATIONS
                          AND CORPORATIONS
  PREAMBLE
  In January 1999, United Nations Secretary General Kofi Annan called for a “Global Compact”
between the UN and the business community. In that compact, he challenged business leaders to
embrace and enact nine core principles derived from UN agreements on labor standards, human rights
and environmental protection. In exchange, he promised, the UN will support free trade and open mar-
kets.
  Citizen organizations and movements recognize that the private sector has enormous influence on
human health, environment, development and human rights. Everyone shares the hope that economic
well-being will bring real human development and ecological security. Yet as UNICEF Executive
Director Carol Bellamy has said, “It is dangerous to assume that the goals of the private sector are
somehow synonymous with those of the United Nations because they most emphatically are not.” At
times corporations work at cross purposes to the wider realization of rights and responsibilities
enshrined in United Nations covenants, declarations and agreements.
  The growing concentration of wealth and power in the hands of fundamentally undemocratic global
corporations and other institutions of globalization with no accountability to governments or peoples is
in direct conflict with the principles and aims of the United Nations to enhance human dignity and the
capacity for self-governance. As the UN Sub-Commission on Human Rights puts it, the UN should not
support institutions or corporations whose activities “create benefits for a small privileged minority at
the expense of an increasingly disenfranchised majority.”
  Citizen organizations and movements support the mission and values of the United Nations. These
objectives must have primacy of place and must not be subordinated to commercial trade, investment
and finance rules. The UN, as an institution that prioritizes human rights, health, labor standards, sus-
tainable development and ecological protection over commercial interests, must have the capacity to
exercise its mandate.
  Citizens organizations and movements recognize that declining financial support from governments
to the UN and its specialized agencies make their job harder. The UN must adjust to these circum-
stances; however it must do so while adhering to its Charter and its impartiality, and without compro-
mising its commitment to its fundamental principles.
  We propose a compact between the UN and civil society, regarding the UN’s relationship with the
private sector. With this compact, we pledge our active support for a strengthening of the United
Nations, financially and politically. Adherence to these nine principles will safeguard the image, mis-
sion and credibility of the United Nations as it deals with the private sector.
Tangled Up In Blue                                                                                        15
THE PRINCIPLES
  1. Multinational corporations are too important for their conduct to be left to voluntary and self-gen-
     erated standards. A legal framework, including monitoring, must be developed to govern their
     behavior on the world stage.
  2. The United Nations will continue to develop tools to ensure universal values of environmental pro-
     tection and human rights, through such mechanisms as multilateral environmental and human
     rights agreements, codes of marketing, and ILO conventions.
  3. The United Nations recognizes the legitimate purpose of national and local legislation to protect
     ecosytems, human health, labor standards, and human rights. The United Nations will assist civil
     society and governments in enacting and implementing such legislation.
  4. The UN must find ways to ensure that other intergovernmental bodies, such as the IMF, World
     Bank and WTO, do not depart from the principles and goals of the UN Charter.
  5. United Nations agencies will advise and offer assistance to corporations wishing to understand and
     improve their human rights and environmental behavior. Such assistance will not be considered a
     “partnership.”
  6. The United Nations does not endorse or promote products or brand names of any private corpora-
     tion, and will avoid the appearance of such endorsements.
  7. The United Nations will avoid any public association or financial relationship with companies with
     destructive practices, or products that are harmful to human health or the environment. Before
     entering any relationship with a corporation, the UN will thoroughly evaluate whether the objec-
     tives of that company are compatible with those of the UN. In doing so, it must set up open and
     transparent processes of dialogue with NGOs and community groups with expertise on those cor-
     porations’ activities.
  8. The United Nations and its agencies will continue to fulfill their mission with funding from gov-
     ernments. In cases where private corporations wish to make a donation, the money will go to pro-
     grams that have no connection to commercial projects for that company.
  9. The UN will act with full transparency in all its dealings with the private sector, at the conceptual,
     planning and implementation stages. NGOs should have access to the same information in this
     regard as the private sector.
Tangled Up In Blue                                                                                              16
          E n d n o t e s
1 Kofi Annan “Working Together,” Business in Africa,          15 Speech of UNICEF Executive Carol Bellamy, April 16,
  February 2000.                                                 1999.
2 Kofi Annan address to World Economic Forum in               16 “Guidelines and Procedures For Mobilization Of
  Davos, Switzerland, Feb. 1, 1999, on file with authors.        Resources,” UNDP, November 1998.
3 Executive Conclusions, “High Level Meeting on The           17 Letter of Bas van der Heide, Coordinator of HAI
  Global Compact” July 26, 2000, United Nations                  Europe, to Dr. Gro Brundtland, May 28, 1999
  Headquarter.                                                   www.haiweb.org/news.brundtland.htm.
4 “Guidelines—Cooperation Between the United Nations          18 International Baby Food Action Network (IBFAN)
  and Business Community,” Office of the Secretary               Comments on WHO Guidelines on Interaction with
  General, published July 17, 2000.                              Commercial Enterprises (Preliminary version July
5 Speech of UNICEF Executive Carol Bellamy to                    1999) posted on haiweb.org/news/ibfancomments.html.
  Harvard International Development Conference,               19 Joshua Karliner, The Corporate Planet: Ecology and
  Cambridge, Mass. April 16, 1999 www.unicef.org/                Politics in the Age of Globalization, (Sierra Club
  exspeeches/99esp5.htm.                                         Books, 1997), San Francisco, pp. 52-55.
6 Some confusion arises because of the way the UN uses        20 Jan-Olaf Willums & Ulrich Goluke, From Ideas to
  words describing the relationship with business. The           Action: Business and Sustainable Development, The
  title of the draft WHO guidelines, for example, refers to      Greening of Enterprise 1992, International
  “interaction” with commercial enterprises. But else-           Environmental Bureau of the International Chamber of
  where WHO uses the term “partnership.” The Secretary           Commerce, Norway, May 1992, p.20-21.
  General's July guidelines refer to “cooperation” with       21 Joshua Karliner The Corporate Planet, p. 172.
  the business communinty, but again uses “partnership”
  elsewhere. Overall, there is little doubt that “partner-    22 For an overview see, Joshua Karliner, The Corporate
  ship” is the way the UN describes the relationship             Planet, pp. 50-57; various sources on the climate issue
  aspired to with the business community, and it is the          exist, for a diversity of resources see http://www.corp-
  most commonly used term.                                       watch.org/feature/climate, and for a comment by Tim
                                                                 Wirth when he was with the Clinton administration see:
7 “Guidelines and Procedures For Mobilization Of                 John H. Cushman, Jr., “U.S. Will Seek Pact on Global
  Resources From the Private Sector,” UNDP Division              Warming” The New York Times, July 17, 1996; on cor-
  for Resources Mobilization and External Affairs,               porate meddling in the Montreal Protocol’s efforts to
  November 1998.                                                 phase-out methyl bromide see Joshua Karliner, Alba
8 Letter from TRAC et al to Secretary General Kofi               Morales, Dara O’Rourke, The Bromide Barons: Methyl
  Annan, July 25th, 2000 http://www.corpwatch.org/               Bromide, Corporate Power and Environmental Justice,
  globalization/un/gcltr2.html.                                  Political Ecology Group/Transnational Resource &
9 Maria Livanos Cattaui “Yes to Annan’s ‘Global                  Action Center, San Francisco, May 1997, pp. 18-21; on
  Compact’ if It Isn’t a License to Meddle” International        corporate influence in the Commission on Sustainable
  Herald Tribune July 26, 2000.                                  Development regarding the biotechnology issue see
                                                                 “UN Accused of Industry Bias on Biotech” Third World
10 Peter Utting, “Business Responsibility for Sustainable        Resurgence, no. 58, Penang, June 1995 and on the
   Development,” United Nation Research Institute for            Biosafety Protocol to the Biodiversity Convention see
   Social Development, Geneva Jan. 2000.                         Andrew Pollack, “Setting Rules for Biotechnology
11 Statement by Pierre Sane, Amnesty International,              Trade,” The New York Times, February 15, 1999.
   Global Compact Press Conference, United Nations            23 “Tobacco Companies Strategies to Undermine Tobacco
   Headquarter, July 26, 2000.                                   Control Activities at the World Health Organization –
12 William New, “UN: NGOs Call for Corporate                     Report of the Committee of Experts on Tobacco
   Regulation” UN Foundation, June 1, 2000.                      Industry Documents,” World Health Organization, July
13 Personal Communication with Roberto Bissio, Third             2000; Gordon Fairclough “Cigarette Firms Tried to Foil
   World Institute, Uruguay, July 10, 2000; Personal             WHO, Say Investigators,” Wall Street Journal August
   Communication with Rosalind Petchesky, Board                  2000.
   Member, Women’s Environment & Development                  24 Letter from Undersecretary General John Ruggie to
   Organization (WEDO), July 27, 2000.                           TRAC et al, July 24, 2000 on file with authors.
14 Question to Maria Eitel Vice President of Nike, Global     25 “Taming Globalization” The Washington Post, August
   Compact press conference, UN Headquarters, July               7, 2000.
   26th, 2000, webcast at www.un.globalcompact.org;           26 Speech by Martin Khor, Director of Third World
   Pacifica Radio's Democracy Now, July 27, 2000.                Network, at the Opening Session of the Millennium
                                                                 Forum, New York, May 22, 2000.
Tangled Up In Blue                                                                                                    17
Endnotes, continued
27 Robert Evans “Report for UN Calls World Trade Body      33 Joshua Karliner, “A Perilous Partnership” Transnational
   ‘Nightmare’” Reuters, Geneva, August 11, 2000.             Resource & Action Center, San Francisco March, 1999
28 “Secretary General Proposes Global Compact On              p. 9.
   Human Rights, Labour, Environment, In Address to        34 Business Humanitarian Forum, “Building Mutual
   World Economic Forum in Davos,” www.un.org/part-           Support Between Humanitarian Organization and the
   ners/business/davos.htm.                                   Business Community” undated report on Jan. 27th,
29 Text of the Global Compact, 1999 version,                  1999 meeting of the BHF; Conference Agenda,
   www.un.org/partners/business.fs1.htm. This language        “Defining New Cooperation in the Humanitarian
   was removed from later on-line versions of the Global      Agenda,” Nov. 1-2, 1999 Washington D.C., and letter
   Compact.                                                   from John Horekens, Director, Division of
                                                              Communications and Information, UNHCR, to TRAC
30 See Kofi Annan, “Address to the Chamber of                 et al, Oct. 8, 1999, on file with authors.
   Commerce of the United States of America”
   Washington DC, June 8, 1999.                            35 Claudia H. Deutsch, “Unlikely Allies with the United
                                                              Nations,” New York Times p. C1, December 10, 1999.
31 “Report for UN Calls World Trade Body ‘Nightmare’,”
   August 11, 2000.                                        36 “UNICEF Accused of Forming Alliance with Baby
                                                              Food Industry,” British Medical Journal, July 15, 2000.
32 David Weissbrodt, “Principles relating to the human
   rights conduct of companies,” working paper prepared    37 Rachel L. Swarns “Loans to Buy AIDS Drugs are
   for the Commission On Human Rights Sub-                    Rejected by Africans” The New York Times, July 22,
   Commission on the Promotion and Protection of              2000.
   Human Rights, 52nd session Item 4, May 2, 2000.
Tangled Up In Blue                                                                                                 18
                      This report was written by Kenny Bruno and Joshua Karliner.
                 TRAC counters corporate-led globalization through education and activism. We work to foster democratic
                 control over corporations by building grassroots globalization – a diverse movement for human rights, labor
                 rights and environmental justice.
                 Our website Corporate Watch provides visitors news, analysis, action resources and research tools.
                 www.corpwatch.org            the watchdog on the web
Thanks to: Debi Barker, Beth Handman, Miloon Kothari, Julie Light, Alison Linnecar, Mele Smith, Elisabeth Sterken
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